D.C. Circuit Review – Reviewed: Obamacare Round 3?

So I am the newest contributor to this blog. I teach administrative law and federal courts at Brigham Young University. I plan on blogging about D.C. Circuit administrative law decisions in a regular feature dubbed D.C. Circuit Review – Reviewed. The feature will begin later this month. Today, however, merits a special post.

Friday morning the D.C. Circuit denied en banc rehearing in another challenge to the Affordable Care Act, this one based on the Origination Clause. Note, co-blogger Nicolas Bagley has written about these challenges here. The theory, according to the Pacific Legal Foundation (counsel for the challenger), is that “if the Individual Mandate is a tax, as the Supreme Court said it was in NFIB v. Sebelius, then it’s still unconstitutional, because it originated in the Senate and not in the House, as the Constitution requires.” In dissent from denial of rehearing, Judge Kavanaugh — joined by Judges Henderson, Brown, and Griffith — argues that the panel reached the right result for the wrong reason. According to Judge Kavanaugh: “The panel opinion concluded that the Affordable Care Act was not a revenue-raising bill for purposes of the Origination Clause and therefore did not have to originate in the House. In my respectful view, that conclusion is untenable. The Affordable Care Act established new subsidies for the purchase of health insurance and expanded the Medicaid program for low-income Americans. Those new subsidies and expanded entitlements cost an enormous amount of money. So as not to increase the annual budget deficit and the overall national debt, the Act imposed numerous taxes to raise revenue. Lots of revenue. $473 billion in revenue over 10 years. It is difficult to say with a straight face that a bill raising $473 billion in revenue is not a ‘Bill for raising Revenue.’ … That said, the Act did in fact originate in the House, as required by the Clause. Although the original House bill was amended and its language replaced in the Senate, such Senate amendments are permissible under the Clause’s text and precedent.” Judges Rogers, Wilkins and Pillard have a long opinion of their own defending the panel decision.

Rick Hasen speculates that the Supreme Court might be interested in the case. I agree this is a fascinating question and the opinions are worth reading. But Supreme Court review? As an appellate court, the Supreme Court “does not review lower courts’ opinions, but their judgments.” Unless the PLF can make a strong showing that Judge Kavanaugh’s theory for affirmance is independently cert-worthy, it is unlikely that the Supreme Court–even if it agrees with Judge Kavanaugh’s views on the “revenue-raising” issue–will take the case because certiorari review would not change the D.C. Circuit’s judgment. In other words, the intra-DC Circuit disagreement about whether the Affordable Care Act is a revenue-raising bill likely will not be enough, by itself, to trigger Supreme Court review.

So can the PLF make such a showing? I confess I know little about this area of law beyond what I read in the D.C. Circuit’s opinions. But assume for the sake of argument that Judge Kavanaugh is right about whether the Affordable Care Act is a bill for raising revenue. As an outsider, it sure seems strange that the Origination Clause is satisfied when the Senate strikes all the language in a House bill and replaces it with entirely new language of the Senate’s own creation. (As Judge Kavanaugh explains, in this case, “[a]fter passing in the House, H.R. 3590 was sent to the Senate. There, Senate Majority Leader Harry Reid offered an ‘Amendment in the nature of a substitute’ to H.R. 3590. The amendment struck all of the language after the bill’s introductory ‘enacting clause’ and inserted in its place the Senate’s version of what became the Affordable Care Act”). What kind of constitutional rule is so easily circumvented? Judge Kavanaugh has two answers. First, even if odd, he says that this is what the Constitution’s text and history require, as well as Supreme Court precedent. And second, he says that the House’s origination power still matters a lot in the real world. It will be interesting to see what the PLF and its amici have to say in response.

About Aaron Nielson

Professor Nielson is an associate professor at Brigham Young University Law School, where he teaches and writes in the areas of administrative law, civil procedure, federal courts, and antitrust. He currently serves as a public member of the Administrative Conference of the United States, a federal agency that studies the administrative process and makes recommendations on ways to improve it. He also co-chairs the Rulemaking Committee of the American Bar Association’s Section of Administrative Law & Regulatory Practice. Previously he chaired the Section's Antitrust & Trade Regulation Committee. Before joining the academy, Professor Nielson was a partner in the Washington, D.C. office of Kirkland & Ellis LLP (where he remains of counsel). He also has served as a law clerk to Justice Samuel A. Alito, Jr. of the U.S. Supreme Court, Judge Janice Rogers Brown of the U.S. Court of Appeals for the D.C. Circuit, and Judge Jerry E. Smith of the U.S. Court of Appeals for the Fifth Circuit.
Follow him on Twitter @Aaron_L_Nielson.